How to secure private investment (six to seven figures)?

[HarvardMan]

I just read the book and figured some like-minded individuals might be able to help me out. I'm looking to raise six to seven figures for some business and investment ideas, but I don't want to give up an ownership percentage, and I don't want to go through the hassle of the banking system. I am, however, willing to pay an attractive interest rate commensurate with the risk a lender would be taking on by providing me with the funds.

What I'm wondering is how to find the type of private investor who could provide me with the capital I'm looking for. It seems to me that there's got to be some sort of network/brokers who could put me in touch with such individuals, but I'm not sure where to find them. Anyone have any experience/advice in this area?

[kamakiri]

Angels are the only ones who would touch that kind of a proposal.

Do you have a business plan?

Any experience?

[HarvardMan]

I guess a better way of rephrasing my question would then be: How does one find angels?

[TimW]

"Angel Financing: How to Find and Invest in Private Capital"
http://tinyurl.com/2ulzqa

Angel Investors
http://www.smallbusinessnotes.com/fi...investors.html

All found in Google within the time it took to type "investment angels". I am certain more could come up. This would be a good way to start.

Another would be to try and find the names of individuals or companies that have invest in similar ventures before...look through press release databases, etc. for such announcements.



TimW
Phoenix

[kamakiri]

Harvard guy - You missed the important questions in my post. What kind of experience do you have, and what is your business plan based on? There is no such thing as a free lunch buddy. Do you really expect someone to give you a cool million in return for some imaginary interest rate return? Anyone with a million to burn would jump at that offer.

NOT!

You don't want to give up ownership? That is spoken like a true wet behind the ears noob. What business could possibly need a million dollars to start up, and how could you possibly be able to say with all seriousness that it takes 6 of 7 figures to get going? That kind of about only works with horse shoes and hand grenades buddy. Lay your ideas down here and at least TimW will will give you some positive feedback on them.

I and a few others might rip them to shreds, but you will be better off for it. Why blow your chance at an investor by showing a craptacular plan? Get the rough edges shaved off here first.

[squeegee]

I once talked to the CEO of a public company and this is what he told me about Venture Capital financing -

-they take your equity
-they are expensive (huge interest rates and fees)
-a year or two down the road they can fire you from the company you built
-very few start ups get VC financing, don't quote me but the number if I recall the number was 2%. The reason VC *seems* so popular is that the newspapers make a big deal about the jackpot successes (google, youtube, ...) which happen to be backed by VC.

I don't know about angels but I assume they may be similar to VCs.

Many new businesses are financed by family, credit cards, savings, customer financing (get your first customers to pay up front), supplier financing (get your suppliers to send you a few units with 60 days to pay, and then sell them before the bill is due)...

If you are determined to start a business with a huge upfront investment, you may be able to pool it together from family and close friends.

How much of your own capital do you have to put in? The more the better, that way you have credibility when you approach investors ("I believe in my idea so much that I am putting in $## thousand of my own money")

Please consider customer or supplier financing. You may be able to keep 100% control of your company and the downside risk can be small or zero.

What kind of business needs such a huge start up fund?

[TimW]

Originally Posted by kamakiri

Lay your ideas down here and at least TimW will will give you some positive feedback on them.

Hahaha...I think you will be happy to know, then, that my initial reaction was like the first parahraph you wrote, but that I decided to be hlpful for once.

Besides...I'm likely to lecture him on COGS and the benefits of expense reduction to increase your bottom line.

[kamakiri]

Tim - Sorry bout that. I really wasn't trying to take a pot shot at you, I just didn't want it to seem like everyone here was against Harv Man, and I had to come up with something to lighten my mood there so that post didn't come off as a complete flame.

One really cool thing about COGS and expenses, is that if you have $1,000,000 in easy funding, they cease to matter for about 11.5 months. Then they add up amazingly fast from that point on.

[TimW]

Originally Posted by kamakiri

Tim - Sorry bout that. I really wasn't trying to take a pot shot at you, I just didn't want it to seem like everyone here was against Harv Man, and I had to come up with something to lighten my mood there so that post didn't come off as a complete flame.

No offense taken....

[EditorDude]

Some accountancy firms sell lists of investors - as do list brokers.